Should authors say ‘NO’ to Amazon’s KDP Select Program? (part 1)

I’m an indie author.  I published my first book last year on Amazon’s KDP Select program.  For those of you who don’t already know what KDP Select is, it is a program whereby you, as the author, agree to make your ebook available exclusively through Amazon for at least 90 days.  In return, you get the following:

  • Preferential promotion through Amazon’s KDP Select promotional advertisement program.
  • Detailed sales and readership statistic reporting not available to titles that are not in the KDP Select program.
  • Ability to run promotional pricing, including free giveaways, which are not available to non-KDP Select titles.
  • Promotion to Kindle Unlimited users as part of their ‘free’ reading program, thus exposing you to a sizable group of readers who may not otherwise see your book through the other advertisement methods.

Sounds good, right?  Amazon is the largest online book retailer, and they are agreeing to give you preferential marketing status so that your book is advertised to a much wider audience than it otherwise would be.  What’s not to like?  Well, actually, there’s a lot not to like.

Mark Coker, creator of the ebook distribution site Smashwords.com, gave an interview as part of the Indie Fringe 2016 conference on the top trends of the publishing industry.  It is a great interview that I highly recommend.  You can watch it here.  In that interview, he discusses KDP Select.  He had many good points to make, but I want to drill down on just two of them in this post.

  1. The KDP Select program effectively buries all independently published books that are NOT in KDP select in an advertising black-hole.
  2. The KDP Select program is training one of the largest indie reader groups in the world to expect to read books for free, thus undermining sales of indie author titles and ultimately de-valuing indie author ebook titles en masse.

The combination of these two effects is having a negative effect on the indie ebook market.  In order to get premium access to Amazon’s customer base for a new ebook, authors are being asked to give their books away for practically free to a large segment of would-be book buyers (Kindle Unlimited users).  You will get some limited financial reimbursement for this from Amazon, but only for pages actually read, and at a much lower reimbursement than what the book’s selling price actually is.  To add insult to injury, Amazon actually won’t agree to the reimbursement rate until AFTER the sales month ends.  You are effectively surrendering your right to sell your ebook at the selling price you want to this large group of ebook customers.  These readers, whether they like the book or not, will certainly not then BUY the book that they have just read for free.  So, if you sign up for KDP Select, you are effectively discounting your book to the point that you will likely not make much money on this large group of users.

Now, let’s say you take your book OUT of the KDP Select program after the first three months.  Your $3.99 ebook is now positioned to make money hand over fist, right?  Wrong.  Now, all those Kindle Unlimited users, who have likely already read your book for free, don’t want to pay to read it.  Additionally, all the other books still in the KDP Select program are showing up in searches ahead of your book.  Thirdly, your book is no longer new, further negatively impacting your search result standing in the coveted ‘new books’ searches.  Your options?  Lower your price even more in order to compete against a game stacked against you, or re-up for KDP Select.

Ask yourself, all things being equal, why would anyone want to buy your ebook for $3.99 on a market flooded with thousands of new ebooks a week when they could either a) read a similar book for free as a member of the Kindle Unlimited program, or b) find dozens of other books on the same topic listed before they even see your book, that they could buy for the same price?  The answer?  They probably won’t buy your book unless you are an author known to them or your genre is so small or niche that you happen to be on the first few pages of their search results.

The net result is that if you DO sign up for KDP select, you are 1) automatically lowering your per unit sale profit by a huge margin, thus undercutting your overall profitability, and 2) contributing to a system which is rigged by Amazon to ultimately force all indie authors to lower their per-unit prices in order to compete.  In a game rigged like this, where even a book priced at $0.99 is too pricey, nobody wins.

Is there an upside to all of this?  Yes, there is, and that will be the subject of my next post. 😉

 

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